Page 1 of 3 123 LastLast
Results 1 to 20 of 58

Thread: Web of Tax Shelters Saved Apple Billions, Inquiry Finds

  1. #1
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,764
    Post Thanks / Like

    Web of Tax Shelters Saved Apple Billions, Inquiry Finds

    http://www.nytimes.com/2013/05/21/bu...%2Findex.jsonp


    WASHINGTON— Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and surprised experts, a Congressional investigation has found.

    Some of these subsidiaries had no employees and were largely run by top officials from the company’s headquarters in Cupertino, Calif., according to Congressional investigators. But by officially locating them in places like Ireland, Apple was able to, in effect, make them stateless – exempt from taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.

    In 2011, for example, one subsidiary paid Ireland just one-twentieth of 1 percent in taxes on $22 billion on pretax earnings from various operations; another did not file a corporate tax return anywhere and has paid almost nothing on $30 billion in profits since 2009.

    “Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” said Senator Carl Levin, a Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations. “Apple sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.”

    John McCain, the Arizona Republican who is the panel’s ranking member, added: “Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale, it is also among America’s largest tax avoiders.”

    Over all, Apple’s tax avoidance efforts shifted at least $74 billion from the reach of the Internal Revenue Service between 2009 and 2012, the investigators said. That cash remains offshore, but Apple could still have to pay taxes on it to American authorities if the company were to return the money to its coffers in the United States.

    Investigators have not accused Apple of breaking any laws, and the company is hardly the only American multinational to face scrutiny for using complex corporate structures and tax havens to sidestep taxes. In recent months, revelations from European authorities about the tax avoidance strategies used by Google, Starbucks and Amazon have all stirred public anger and spurred several European governments, as well as the Organization for Economic Cooperation and Development, a Paris-based research organization for the world’s richest countries, to discuss measures to close the loopholes.

    Still, the findings about Apple were remarkable both for the enormous amount of money involved – tens of billions of dollars – and the audaciousness of the company’s assertion that its subsidiaries are beyond the reach of any taxing authority because they are stateless.

    “There is a technical term economists like to use for behavior like this,” said Edward Kleinbard, a law professor at the University of Southern California in Los Angeles and a former staff director at the Congressional Joint Committee on Taxation. “Unbelievable chutzpah.”

    And while Apple’s strategy was unusual in its scope and effectiveness, it underscores how riddled with loopholes the American corporate tax code has become, critics say. At the same time, it shows how difficult it will be for Washington to overhaul the tax system and shut these loopholes down.

    “It’s like playing Whac-A-Mole,” said one Congressional staff member. “We’re still puzzling our way through this.”

    Although the Senate examination of Apple was started by the Senate subcommittee more than 18 months ago, investigators discovered one major subsidiary in Ireland only Sunday night. A Senate hearing on the issue is scheduled for Tuesday, and will include testimony by Apple’s chief executive, Timothy D. Cook.

    Apple declined to comment, except to make available a text of the testimony Mr. Cook is expected to provide at the hearing.

    Mr. Cook is expected to emphasize that Apple is most likely “the largest corporate income tax payer in the U.S., having paid nearly $6 billion in taxes to the U.S. Treasury” in the last fiscal year. “Apple does not use tax gimmicks,” Mr. Cook is expected to testify.

    He is expected to seek to rebut the Congressional findings by arguing that some of Apple’s largest subsidiaries do not reduce Apple’s tax liability, and to argue in support of a sweeping overhaul of the United States corporate tax code – in particular, lowering rates on companies moving foreign overseas earnings back to the United States. Apple currently assigns more than $100 billion to offshore subsidiaries.

    Atop Apple’s offshore network is a subsidiary named Apple Operations International, which is incorporated in Ireland but keeps its bank accounts and records in the United States, and holds board meetings in California.

    Because the United States bases residency on where companies are incorporated, while Ireland focuses on where they are managed and controlled, Apple Operations International was able to fall neatly between the cracks of the two countries’ jurisdiction.

    Apple Operations International has not filed a tax return in Ireland, the United States or any other country over the last five years. It had income of $30 billion between 2009 and 2012
    . By shuttling revenue between international subsidiaries, Apple was able to sidestep paying taxes, Congressional investigators said.

    Despite Apple’s public contention that it pays substantial amounts in taxes to the Internal Revenue Service, the Senate’s permanent subcommittee on investigations also found evidence that the company turned over substantially less money to the government than its public filings indicated.

    While the company cited an effective rate of 24 to 32 percent in its disclosures, its effective tax rate was 20.1 percent, based on the committee’s findings. And for a company of Apple’s size, the resulting difference was substantial — more than $8 billion in 2009, 2010 and 2011.

    Because of these strategies, tax experts say, the government is forced to rely more and heavily on payroll taxes and individual income taxes to finance its operations. For example, in 2011, individual income taxes contributed $1.1 trillion to federal coffers, while corporate taxes added up to $181 billion.

    As these earnings have accumulated offshore, many companies have been pushing more aggressively for a tax holiday that would allow them to repatriate the money at lower rates. The hearings on Capitol Hill, along with Apple’s disclosures, are likely to make that a much more difficult proposition for members of Congress to stomach.

  2. #2
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    US tax rates are amongst the highest in the world. this is NOT new news.

    ALL public companies who earn outside the US pay no US tax on NON US earnings until those funds are brought here.


    This law is old and has survived democratic congress and senate for over 50 years.

    So what's your point? they should pay more and get what in return?

    Obamacare and more regulation?

    Boycott Apple, Google etc. You won't. YOU are hot air.

  3. #3
    Rookie
    Join Date
    Mar 2004
    Posts
    818
    Post Thanks / Like

    Cool

    Quote Originally Posted by southparkcpa View Post
    US tax rates are amongst the highest in the world. this is NOT new news.

    ALL public companies who earn outside the US pay no US tax on NON US earnings until those funds are brought here.


    This law is old and has survived democratic congress and senate for over 50 years.

    So what's your point? they should pay more and get what in return?

    Obamacare and more regulation?

    Boycott Apple, Google etc. You won't. YOU are hot air.
    See, this is the problem I have with some people. In the immigration thread, you stated how illegal immigrants are coming here to receive free benefits, something you aren't too happy about. Yet in this thread, you defend a multi-billion corporation for doing their best to not pay taxes. You lambast one group and support another when they're doing the same thing. I wonder why? And you're the only person to be so harsh on the poor and forgiving of the rich. Why does one deserve scorn and the other praise? Maybe you can explain the difference to me.

  4. #4
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,764
    Post Thanks / Like
    Quote Originally Posted by southparkcpa View Post
    US tax rates are amongst the highest in the world. this is NOT new news.

    ALL public companies who earn outside the US pay no US tax on NON US earnings until those funds are brought here.


    This law is old and has survived democratic congress and senate for over 50 years.

    So what's your point? they should pay more and get what in return?

    Obamacare and more regulation?

    Boycott Apple, Google etc. You won't. YOU are hot air.
    I assume you are talking to me.
    I posted a report from the NY Times.
    I did not write it and I did not make up the facts.

    If my assumption is incorrect I apologize.

  5. #5
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,764
    Post Thanks / Like
    Quote Originally Posted by JoeyStylez View Post
    See, this is the problem I have with some people. In the immigration thread, you stated how illegal immigrants are coming here to receive free benefits, something you aren't too happy about. Yet in this thread, you defend a multi-billion corporation for doing their best to not pay taxes. You lambast one group and support another when they're doing the same thing. I wonder why? And you're the only person to be so harsh on the poor and forgiving of the rich. Why does one deserve scorn and the other praise? Maybe you can explain the difference to me.
    You are silly.

    If you r rich and game the system for billions of dollars that you will never spend (because it is in Ireland), you are cool.

    If you are poor and game the system for a couple of thousand dollars a year so that you can live in the ghetto and use food stamps, you are a leach.

  6. #6
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    Quote Originally Posted by JoeyStylez View Post
    See, this is the problem I have with some people. In the immigration thread, you stated how illegal immigrants are coming here to receive free benefits, something you aren't too happy about. Yet in this thread, you defend a multi-billion corporation for doing their best to not pay taxes. You lambast one group and support another when they're doing the same thing. I wonder why? And you're the only person to be so harsh on the poor and forgiving of the rich. Why does one deserve scorn and the other praise? Maybe you can explain the difference to me.
    NOT AT ALL. you need to read, open minded at what I wrote.

    in both cases I cited law and was taking the position that the law should be followed. we BREAK the law as a society allow illegals in for the sake of what..low prices on lawn service and fruit???

    We then lambaste companies for obeying the law?

    MY POSITION is not relevant noe am I so vain to think anyone cares.mFornthe record, if you read my post on illegals, I am in favor of them being allowed to come here legally. Status quo is ridiculous.

    On Apple..I simply shake my head at the young liberals with their MAC books and IPhones pretending they care about tax law.

  7. #7
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    Quote Originally Posted by Buster View Post
    You are silly.

    If you r rich and game the system for billions of dollars that you will never spend (because it is in Ireland), you are cool.

    If you are poor and game the system for a couple of thousand dollars a year so that you can live in the ghetto and use food stamps, you are a leach.
    Apple paid 14B in taxes last year.

    Want a REAL crock of Shlt....look at the large universities, compiling BILLIONS in donations, spending almost none of it and paying NO TAX.

  8. #8
    Rookie
    Join Date
    Mar 2004
    Posts
    818
    Post Thanks / Like

    Cool

    Quote Originally Posted by southparkcpa View Post
    NOT AT ALL. you need to read, open minded at what I wrote.

    in both cases I cited law and was taking the position that the law should be followed. we BREAK the law as a society allow illegals in for the sake of what..low prices on lawn service and fruit???

    We then lambaste companies for obeying the law?

    MY POSITION is not relevant noe am I so vain to think anyone cares.mFornthe record, if you read my post on illegals, I am in favor of them being allowed to come here legally. Status quo is ridiculous.

    On Apple..I simply shake my head at the young liberals with their MAC books and IPhones pretending they care about tax law.
    OK, so for you it is strictly a LEGAL issue. Fair enough. So if the govt. passes new immigration laws that make it possible for the majority of illegals already in America to attain citizenship, would you against that? Paths to citizenship for those who are willing to take the steps to do so, all done legally. Would you then no longer have a problem with it?

    As far as lambasting companies that follow the law, my belief is that the law should be amended. We all have a responsibility to give back something to this society, as individuals and as corporations. America made it possible for Apple to be as successful as it is, therefore it has a moral responsibility to give back a fair amount. They certainly have every right to be as profitable as they can be, and there should never be a limit on how much money a company can make. But going out of your way to avoid paying taxes is, quite simply, just not cool. This recent trend of acceptable greed and a renouncement of the social contract is a very ugly element that needs to done away with. We ALL contribute to each others success in one way or another. how do you think we made it through WWII? Without everyone doing their part, this country would be speaking German right now. Whether you (not you in particular, you in general) like it or not, whether you believe it or not, we are all in this together. It's the American way.

    (BTW liberals don't have a monopoly on Apple products. I'm quite sure right wingers use them too.)

  9. #9
    Veteran
    Join Date
    Apr 2010
    Posts
    1,001
    Post Thanks / Like
    Quote Originally Posted by southparkcpa View Post
    NOT AT ALL. you need to read, open minded at what I wrote.

    in both cases I cited law and was taking the position that the law should be followed. <snip>.

    Well said.

    imo, the tax laws are bad, and we should change them. The immigration laws are also bad, we should change them too. What we shouldn't do is decide to ignore laws we dislike, or condemn corporations for operating within the law to minimize their tax burden. Apple has an obligation to it's shareholders to do this. The fact that Apple's interests lead it to act in a way that takes jobs and money out of the United States reflects poorly on the country, not Apple.

  10. #10
    Rookie
    Join Date
    Mar 2004
    Posts
    818
    Post Thanks / Like

    Cool

    Quote Originally Posted by Axil View Post
    Well said.

    imo, the tax laws are bad, and we should change them. The immigration laws are also bad, we should change them too. What we shouldn't do is decide to ignore laws we dislike, or condemn corporations for operating within the law to minimize their tax burden. Apple has an obligation to it's shareholders to do this. The fact that Apple's interests lead it to act in a way that takes jobs and money out of the United States reflects poorly on the country, not Apple.
    When companies exploit and hire illegal immigrants, does that reflect poorly on the country too? Or is personal responsibility limited only to people on welfare?

  11. #11
    Jets Insider VIP
    Join Date
    Dec 2005
    Location
    Phoenix, AZ (Jets Stadium Section 246)
    Posts
    35,658
    Post Thanks / Like
    Quote Originally Posted by JoeyStylez View Post
    See, this is the problem I have with some people. In the immigration thread, you stated how illegal immigrants are coming here to receive free benefits, something you aren't too happy about. Yet in this thread, you defend a multi-billion corporation for doing their best to not pay taxes. You lambast one group and support another when they're doing the same thing. I wonder why? And you're the only person to be so harsh on the poor and forgiving of the rich. Why does one deserve scorn and the other praise? Maybe you can explain the difference to me.
    But one group is breaking the law, correct? I'm talking about the group you identified as "illegal". The other group of companies are following the law and using it to the best of their ability.

    If you don't agree with the law, work to change it.

  12. #12
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    Quote Originally Posted by JoeyStylez View Post
    OK, so for you it is strictly a LEGAL issue. Fair enough. So if the govt. passes new immigration laws that make it possible for the majority of illegals already in America to attain citizenship, would you against that? Paths to citizenship for those who are willing to take the steps to do so, all done legally. Would you then no longer have a problem with it? Hey Knucklehead, I am all for that. I have said it a hundred times. I believe ALL people should be allowed to come here legally you are showing that you are opinionated and do NOT read the entire post.

    As far as lambasting companies that follow the law, my belief is that the law should be amended. We all have a responsibility to give back something to this society, as individuals and as corporations. America made it possible for Apple to be as successful as it is, therefore it has a moral responsibility to give back a fair amount. They certainly have every right to be as profitable as they can be, and there should never be a limit on how much money a company can make. But going out of your way to avoid paying taxes is, quite simply, just not cool. This recent trend of acceptable greed and a renouncement of the social contract is a very ugly element that needs to done away with. We ALL contribute to each others success in one way or another. how do you think we made it through WWII? Without everyone doing their part, this country would be speaking German right now. Whether you (not you in particular, you in general) like it or not, whether you believe it or not, we are all in this together. It's the American way.

    No question but this nonsense about "you didn't build that" is nonsense. I am a CPA, work 70 hrs a week in tax season, went to night school with 2 kids etc... I make a GREAT living finally. I have little sympathy for kids who snowboard and work 40 hrs a week and make only 50K a year. My successful clients work harder than the average person. Its that simple. I saw a kid yesterday who interned for me 7 years ago. He had the balls to take 3 days off in tax season, during a paid internship that 10 kids wanted. I paid him $18 an hour as a college kid. He has been through 4 jobs in 6 years. No surprise. Im sure he blames the system too.

    (BTW liberals don't have a monopoly on Apple products. I'm quite sure right wingers use them too.)
    Agreed. 5 years ago I bought an Iphone. Loved it. Immediately bought 15K of Apple stock. That stock hit about 70K in value and is now down to about 45K.
    Last edited by southparkcpa; 05-21-2013 at 05:53 AM.

  13. #13
    Jets Insider VIP
    Join Date
    Aug 2005
    Posts
    13,179
    Post Thanks / Like
    What's comical is the joint committee on taxes, aka the peoples who write the tax code are outraged at Apple for following the laws they are responsible for.

    Seems to me the committee members are the ones who should be investigated.

  14. #14
    Veteran
    Join Date
    Apr 2010
    Posts
    1,001
    Post Thanks / Like
    Quote Originally Posted by JoeyStylez View Post
    When companies exploit and hire illegal immigrants, does that reflect poorly on the country too?
    Yes. Yes it does. Now it also reflects poorly on the companies that are benefiting from illegal practices. The rhetoric around so called "loop holes" is such that people believe that Apple exploiting loopholes is akin to them hiring illegals, or dumping toxic waste into the sewer, or doing one of a thousand other things that could give them a competitive advantage but are explicitly illegal in this country.

    There is a difference.

    Quote Originally Posted by JoeyStylez View Post
    Or is personal responsibility limited only to people on welfare?
    Our welfare system and number of recipients also speaks poorly of the US. It incentives people to be unproductive. I have absolutely no problem with those on welfare taking every dime they legally can from the system. If you qualify for a free government cell phone, you should go get one. You should also take every dime of tax relief you can personally get. Just like apple.

    I don't have a problem with people maximizing their welfare benefits, i have a problem with the welfare system.

  15. #15
    All Pro
    Join Date
    Jan 2006
    Location
    greenwich village, NYC
    Posts
    8,117
    Post Thanks / Like
    Quote Originally Posted by Winstonbiggs View Post
    What's comical is the joint committee on taxes, aka the peoples who write the tax code are outraged at Apple for following the laws they are responsible for.

    Seems to me the committee members are the ones who should be investigated.
    I have to give Apple credit. They found a pretty obscure method to essentially make a substantial portion of their tax burden "stateless" by gaming technicalities between countries. The reality is that no one who crafted the corporate tax laws likely saw this eventuality. Otherwise this would be non-news. That's the problem with an overly complex tax code that provides innumerable exceptions and exemptions. Lower the rate to 15% and eliminate the loopholes. It's that simple. And it won't happen in our lifetime. Too many well-heeled pigs feeding at the trough.

  16. #16
    Hall Of Fame
    Join Date
    Oct 2011
    Location
    New York
    Posts
    19,447
    Post Thanks / Like
    So Steve Jobs was an evil capitalist after all. Go figure.

    And to think of how revered he is by the hippies and occupiers.

  17. #17
    JetsInsider.com Legend
    Join Date
    Mar 2005
    Posts
    49,999
    Post Thanks / Like
    Quote Originally Posted by southparkcpa View Post
    Apple paid 14B in taxes last year.
    On how much profit?

  18. #18
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    Quote Originally Posted by FF2® View Post
    On how much profit?
    The legal tax was paid.....what's the problem?

  19. #19
    Jets Insider VIP
    Join Date
    Aug 2005
    Posts
    13,179
    Post Thanks / Like
    Quote Originally Posted by FF2® View Post
    On how much profit?
    You do realize that profits end up somewhere and when they do they are taxed by people who actually are represented in Congress.

  20. #20
    Jets Insider VIP
    Join Date
    Sep 2005
    Location
    NC
    Posts
    18,353
    Post Thanks / Like
    Quote Originally Posted by FF2® View Post
    On how much profit?
    The legal tax was paid.....what's the problem?

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Follow Us